Unilever cleans up with pounds 360m Canadian buy

NIGEL COPE

Unilever, the Anglo-Dutch consumer products giant, made its largest acqusiition for more than five years yesterday when it agreed to pay pounds 360m for Diversey, the industrial cleaning division of Molson, the Canadian brewer.

The deal doubles Unilever's share of the industrial cleaning products market and makes it number two behind Henkel-Ecolab of Germany.

Diversey is based in Toronto and specialises in the manufacture of non- domestic cleaning products. It is particularly strong in the food and beverage markets of North America, Europe, Japan and the emerging markets. Unilever says Diversey will complement Lever Industrial International, its existing industrial cleaning business that makes floor care and surface cleaning products.

David Laing, of brokers Henderson Crosthwaite, said: "It fits nicely with their existing business and I'd imagine Unilever will be looking to add to it with similar deals if it can find them."

Diversey achieved operating profits of pounds 34m on sales of pounds 507m in the year to March 1995. The value of net tangible assets was pounds 184m at the half-year ended September.

The deal is likely to involve some job losses in the UK as Lever and Diversey have British factories and head offices.

Diversey employs 500 in the UK in a Northampton head office and two manufacturing plants in Luton and Alfreton, Debyshire. Lever has 630 staff in High Wycombe and Runcorn. The company declined to comment on redundancies yesterday, saying no decision would be made on job cuts before a full review. However, it said Diversey's head office would remain in Mississauga, Ontario, while the Lever Industrial headquarters will stay in Holland.

Unilever claimed the deal would give it 14 per cent of the industrial cleaning products market which is worth pounds 7.4bn world-wide. The market is growing particularly fast in Latin America and Asia.

Last week Unilever announced the acquisition of the Hong Kong-based Weiss group, which has a strong base in China, one of the fastest growing parts of the market.